As Obama visits, signs that India is pushing back against China

NEW DELHI, Jan 21 (Reuters) - When Sri Lanka unexpectedly
turfed out President Mahinda Rajapaksa in an election this
month, it was the biggest setback in decades for China's
expansion into South Asia - and a remarkable diplomatic victory
for India.

Despite New Delhi's protestations, diplomats and politicians
in the region say India played a role in organising the
opposition against pro-China Rajapaksa.

His successor, President Maithripala Sirisena, has said
India is the "first, main concern" of his foreign policy and
that he will review all projects awarded to Chinese firms,
including a sea reclamation development in Colombo that would
give Beijing a strategic toehold on India's doorstep.

India has pushed back against China elsewhere in the region
since Prime Minister Narendra Modi took office in May, improving
ties with Japan and Vietnam, both locked in territorial disputes
with Beijing, and contesting a port project in Bangladesh that
could otherwise have been a cakewalk for China.

The new robust diplomacy, which Modi calls "Act East", has
delighted Washington, which has been nudging India for years to
dovetail with the U.S. strategic pivot toward the region.

When President Barack Obama makes a landmark visit to India
starting Sunday, he will be the chief guest at New Delhi's
showpiece Republic Day military parade, and rarely for a
presidential trip, is not scheduled to visit any other country
before returning to Washington.

Evan Medeiros, Obama's point man for Asian diplomacy, told
a conference at the Brookings Institution on Wednesday that
Obama would discuss Modi's shift from "Look East" to "Act East"
when he was in India.

"We are looking very seriously at ways in which the U.S. and
India can work more together in the Asia Pacific on a whole
range of issues," said Medeiros, director for Asia at the White
House's National Security Council.

Medeiros also referred to a trilateral security dialogue
involving the United States, Japan, and India.

Washington made no bones about its distaste for Sri Lanka's
Rajapaksa, who critics accuse of war crimes, corruption and
nepotism. But until last year India was indecisive, perhaps
afraid of pushing the hero of the war against Tamil separatists
even closer to China.

That changed in September, when Rajapaksa allowed a Chinese
submarine to dock in Colombo, without informing India, as it was
bound to under an existing agreement.

"That was the last straw," a senior Indian diplomat said.

"He told Modi: "the next time I will keep you informed,""
the diplomat said, a promise that was broken when the submarine
visited again in November.

In the build up to the Jan 8 election, India played a role
in uniting Sri Lanka's usually fractious opposition, for which
the station chief of India's spy agency was expelled, diplomatic
and political sources say.

"At least that was the perception of Mahinda Rajapkasa,"
said M.A. Sumanthiran, a prominent member of the Tamil National
Alliance, a coalition of parties close to India. "He managed to
get one of their top diplomats recalled."

The Indian government denies any of its officers was
expelled. But Sumanthiran said Modi had in a meeting encouraged
the Tamil alliance to join forces with others in politics.

"The Indians realised that you can't do business with this
man and they were hoping for a change," he said.

"FAMILY MATTER"

On Friday, Sri Lanka said it would review a $1.5 billion
deal with China Communication Construction Co Ltd to
build a 233 hectare patch of real estate on redeveloped land
overlooking Colombo's South Port.

In return, China was to get land on a freehold basis in the
development. This is of particular concern for India, the
destination for the majority of the trans shipment cargo through
Colombo.

"The message is clear, that you do not ignore Indian
security concerns," said the Indian diplomatic source.

Modi is looking for similar good news elsewhere in South
Asia. He has already visited Nepal twice, becoming the first
Indian prime minister to travel to the Himalayan buffer state
with China in 17 years, and signing long delayed power projects.

India has muscled into an $8 billion deep water port project
that Bangladesh wants to develop in Sonadia in the Bay of
Bengal, with the Adani Group, a company close to Modi,
submitting a proposal in October. China Harbour Engineering
Company, an early bidder, was previously the front-runner.

"Modi is willing to engage on long-term issues that stretch
beyond India's border, including maritime security in the South
China Sea, as well as North Korea and Islamic State militants in
Iraq and Syria," said Richard Rossow at policy think tank CSIS.

"That's when we start to think about India as a regional
global provider - or as a global provider of security."

However, the bonhomie has limits - India and the United
States do not see eye-to-eye on Pakistan, New Delhi's
traditional foe that enjoys substantial funding from Washington.

Tricky conflicts over trade and intellectual property hold
back business, and India has limits to its ability to project
force outside its immediate neighbourhood.

But Modi's policies mark a departure from India's
traditional non-aligned approach to foreign power blocs.

"Having the U.S. president at the Republic Day celebration
is a good thing, he is blessing Modi," said Mohan Guruswamy, of
the Centre for Policy Alternatives, a think-tank.

"And that is a lesson to the Chinese that you have to mend
your fences with us."
(Additional reporting by Shihar Aneez in Colombo; David
Brunnstrom and Roberta Rampton in Washington; Editing by Raju
Gopalakrishnan)